Apple Downgraded Despite Strong iPhone Launch

12/17/2012 11:10AM

Apple was downgraded to a neutral rating by Citigroup late Sunday, citing research that shows "near-term supply-chain order cuts" that bring into question the strength of iPhone 5. Dan Gallagher reports on Markets Hub. Photo: Getty Images.

This transcript has been automatically generated and may not be 100% accurate.

... I ... all she is on ... the three dollars and seventy four cents to a little more than one percent ... the stock with around five ten fallen on Friday stood down a little being too though this Excel a circle in the five hundred dollar level that some good news over the weekend at China but still the pressures on Apple shares ... MarketWatch's Dan Gallagher got up early to come talk to stay on this one ... Danna I'll what's the latest with Apple today ... well I think all were seen you know as you know we have the the the statement from them over the weekend about the I phone sales in China ... but that haven't really start and that really hasn't stand this iconic groundswell among analysts that ... we think that the I phone ... five is not in itself quite as high as expected ... um not so much in ... the December quarter of a concern for our show I mean the yes just a pre good for December Puerto Rico in the next year ... I there's a lot of essence are cherry to come down a we saw a downgrade of Apple on Sunday from Citigroup ... and that's of course I think significant brokerage it's made a downgrade of Apple in quite some time ... I and that's really built on some negative sentiment on that ... this group no was in thinking they said ... that they were top suppliers in Asia a nice that again last week at the beginning of the week everything sounded great them by the end of week to become apparent that Apple was coming quarters ... so you're seeing some some weakening of demand ... here's the big question right Apple iPad this field ... basically to themselves ... for a while ... that is definitely changing ... how much is that going to affect them ... well the I phone is their big the most important product by a longshot survey dystrophin single source of revenues ... by even bigger actor Peter earnings so it's a product that they really ... I that that I think the stock really depends on the right ... by the I phone five is a very well reviewed smartphone ... ah but when you consider the fact there's a lot more competition in smartphones now and resume early well ... um the an amicable analysts agrees the point this morning that Apple may be getting close to a saturation point of the high end where ... there's not as much growth for them that out because a lot of people at that and already have an I phone ... aam it we and those who are in addition our attention so they ... they may be starting hit some limits may be small large numbers here ... I'm yet it's you know it'll be inching watching going forward but I you know it's it's the I phone is such a crucial part of the company's of ... you know value and business strategy when asked start comedown for that device I think it deftly hurts stock ... on the look and then cleared more than eight billion dollars last quarter they make a lot of money ... a lot of money on the balance sheet that pay a dividend is a a wildly profitable company ... the question is the one you're paying up for the stock ... where's the growth ... I that's it that's actually true and even if even if some of these estimates are that mimic come true and she's out in two thousand thirteen ... either so probably Guinea be one of those profitable companies in the tech sector by a longshot ... Pablo with Apple course you know the it Department Assistant Haq view with some very high expectations ... they've done so good for so long that the accusations are very high ... so when those expectations start to come down to what may be more realistic levels ... I think you start to see it away out on the stock more more so than BC and smother got it right I think Alan appreciated getting up early to come talk to assess the system ...